Top 5 things to know about Scott Rothstein(Read article summary)
South Florida megalawyer Scott Rothstein is indicted on charges that he used a $1.2 billion Ponzi scheme to peddle influence.
South Florida lawyer Scott Rothstein was arrested Tuesday morning on five charges stemming from an alleged $1 billion Ponzi scheme. Here are five things to know about the flashy, high-powered attorney whose quick rise to prominence brought plenty of attention but also questions about the stability of his empire.
1. The Charges
On Tuesday, federal officials charged Mr. Rothstein with mail fraud, wire fraud, money-laundering, and two other counts related to a $1.2 billion Ponzi scheme.
They allege that he and unnamed co-conspirators convinced investors to make high-interest loans to fictitious clients of his law firm and also induced them to buy at a discount purported confidential settlement agreements in civil cases with the promise that they would be paid back in full over time. In addition to paying back old investors with new money, Rothstein used the funds to buy preferential police treatment for his businesses and law firm, purchase restaurants to serve as hubs for influence peddling, and as bonus money for his attorneys who agreed to make political donations, according to the federal complaint.
Rothstein pleaded not guilty to the charges on Tuesday.
2. A fast-rising empire-builder
Rothstein's law firm, Rothstein Rosenfeldt Adler P.A., was eight lawyers strong at its 2002 founding. Within six years, it had exploded to 58, including a former mayor of Boca Raton, Fla.
And then there are his $2 million in political contributions since 2006, including over $500,000 to John McCain's presidential campaign and the national Republican Party. Democratic politicians also received donations from Rothstein, though in much smaller amounts: former New Mexico governor Bill Richardson received $6,500 and Senate Majority Leader Harry Reid (D) of Nevada got $9,600. The federal complaint charges that Rothstein was able to circumvent limits on political donations through bonuses to his attorneys who made political donations.
Rothstein's partnership with hard-hitting GOP ad guru Roger Stone also attested to his clout.
Rothstein's big-spending ways and race to the top of the Fort Lauderdale glitterati has legal and business insiders wondering: Who is this guy? Is he for real, or is he building a house of cards?
3. A flashy persona
Rothstein was the owner of a stable of cars, homes, and boats to make an oil sheikh blush. His 13 properties total $36.5 million in value, including a $6.45 million home in Isla Bahia, Fort Lauderdale; a $5.95 million New York City apartment; and two $2.8 million properties in Narragansett, R.I., according to an analysis done by the South Florida SunSentinel.
According to the same analysis, Rothstein's luxury automobile fleet was also star-studded: two $1.6 million Bugatti Veyrons, five Ferrari models ranging from $443,712 to $179,950, and three Lamborghini's worth more than $300,000 apiece. The 24 vehicles were registered to Rothstein and a series of 23 companies he incorporated between February 2007 and October 2008.
He also owns an 87-foot, $5-million yacht, the Princess Kimberly, and is part owner of a luxury vodka maker, a high-end watch company, and a sports-marketing firm.
4. A security-conscious operator
Swipe a security card over a scanner, walk under a hidden microphone and a surveillance camera and go to an intercom to be buzzed through a second door.
Enter a soundproof room after passing by an off-duty police officer in uniform. Photos of smiling politicians and celebrities line the walls, all standing next to a spiky-haired, sharply dressed man -- the same man sitting behind the desk.
That's after stepping off a private elevator.
He was also careful enough to ask associates which countries did not have extradition treaties with the United States and Israel, according to the SunSentinel. When Morocco burbled up as a possibility, Rothstein disappeared to the North African nation after socking $16 million away in a bank account there before returning.
5. He wants to pay it all back
In addition, Rothstein's confidence is legendary. He never stopped talking to reporters, even as he held out in a hotel room with his lawyer Monday. Below, a video of Rothstein's open banter during lunch at a well-known eatery.
"Look, I sleep in the bed I make," he told the New Times. "I tend toward the flashy side, but it's a persona."